Activists demonstrated against tax evasion and money-laundering outside the European Commission in Brussels this week.

Yves Herman/Reuters

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The leaked “Panama Papers,” revealing the ownership of thousands of secret bank accounts, have thrown up juicy details about friends of Vladimir Putin’s, star international soccer players, and celebrity entertainers suspected of stashing their millions beyond the taxman’s reach.

But the revelations have also drawn attention to much graver, real-world implications.

Publication of the Panama Papers is likely to galvanize international efforts already under way to plug some of the tax loopholes in the world’s financial system. “This is the wake-up call that should prompt the radical change that is needed,” says John Christensen, head of the Tax Justice Network, a British-based lobbying and research group.

Christine Clough, program manager at Global Financial Integrity, a Washington-based nongovernmental organization, concurs. "We can’t undo [tax havens] overnight, but this movement is like a boulder going downhill; it is gaining speed and getting harder to stop,” she says. “The 'Panama Papers' and the global attention they have mobilized have really helped that process.”

In the meantime, however, the repercussions are being widely felt.

The Panama Papers have solidified for many the idea that there is one rule for average people and another for elites and major companies – a feeling that has special meaning in an age of economic austerity, such as Europeans are suffering. “People are very sensitive to double standards and hypocrisy,” says Alina Mungiu-Pippidi, who heads the European Research Centre for Anti-Corruption and State Building in Berlin. “And they won’t put up with it anymore.”

The publicity surrounding the leak from Panama will damage mainstream European politicians, she warns, because it seems to confirm a common perception that wealthy and powerful individuals and groups are above the law. This will benefit extreme right-wing populist parties, Prof. Mungiu-Pippidi says. “Corruption will be a major electoral issue, and the parties that will use it are not so nice.”

The prime minister of Iceland has already resigned in the wake of revelations he owns an offshore company, and the discovery that British premier David Cameron’s father set up a shell company has weakened his credibility. Spain's industry minister also stepped down Friday, after falsely denying that he had ever had links to tax havens.

Schools and roads that don't get built

Tax havens such as Panama, the British Virgin Islands, and Mauritius, meanwhile, play a key role in denying developing countries the revenues they could use to build schools, hospitals, and roads, according to the United Nations and international activists.

A UN report last year estimated that developing countries lose $100 billion in tax revenues every year because foreign companies invest through tax havens that allow them to protect their profits.

In India, for example, in 2007, Vodafone bought a controlling interest in a mobile phone company owned by Hutchison Whampoa, a Hong Kong-based firm, for $11.2 billion. But Hutchison owned its Indian business through a series of offshore shell companies, and the sale was registered as a transfer of shares between a Cayman Islands company and a Vodafone subsidiary in the Netherlands.

The Indian government had expected to garner $2.2 billion in capital gains tax on Hutchison’s profit; that would have been enough to pay for a year’s worth of subsidized midday meals for almost every primary schoolchild in India. But the Indian Supreme Court ruled that no tax was due on an offshore-to-offshore transaction that broke no laws.

In 20 of the 82 countries studied from 2008 to 2012, such flows amounted to more than the combined total of development aid and foreign direct investment. Nearly half of them lost more money to tax havens than they spent on education or healthcare. “That illicit flows have an adverse impact on developing countries is no longer a secret,” the GFI report said.

Reforms under way

The world’s governments are paying attention. The Group of 20 has tasked the Paris-based Organization for Economic Cooperation and Development (OECD), the rich countries’ club, with designing a system for the automatic exchange of information among national tax authorities, to improve cooperation among them.

This is due to take effect next year, but its reach will be limited by the fact that the United States will not be part of it.

The OECD has also come up with a new international accounting standard that will prevent multinational corporations from reporting all their profits in a low-tax country such as Luxembourg. Instead they will have to break their income down country by country, and pay taxes in each location.

That should help developing countries collect more money, but the new rules will bind only companies with more than $750 million in annual turnover, which will limit their impact.

At the same time, activists are pushing for a public registry in every country of all companies and their real owners; Britain is setting up such a registry, but is not requiring any of its overseas dependencies – most of which are tax havens – to sign up.

Activists and reform-minded governments are strengthened by rising public awareness and outrage. “Protests against tax havens are happening around the world, from Iceland to Nigeria,” points out Shaazka Beyerle, author of a recent book on “people power” movements against corruption. “There is potential for their development into organized nonviolent resistance.”

Tax havens “have rocketed really fast to a significant place on the international agenda,” says Ms. Clough of Global Financial Integrity.